Hotline #793 -- January, 11 2013

Amtrak released the bi-annual Amtrak System Timetable this week, with the winter-spring edition—effective January 14—featuring information on several new services.

Amtrak outlined some of the more significant changes on their website:

Major updates include the recently launched services: the Amtrak Virginia Northeast Regional service to Norfolk, Va., the extension of Downeaster service to Freeport and Brunswick, Maine, and the new Amtrak Thruway bus service in Eastern North Carolina.  Also, Amtrak recently announced the addition of a new weekday Acela Expressround-trip betweenNew York andWashington,D.C. beginning on Jan. 28 [not shown in the new national timetable].  Most other timetable changes are minor or seasonal in nature.

The new timetable will be available in stations, and can be ordered and viewed online at Amtrak.com.

 

Virginia’s Governor Bob McDonnell has put forth a controversial transportation proposal that would completely eliminate the gasoline tax, replacing it with an 0.8 percent increase in the state's sales tax that would go to a fund dedicated to transportation.  The diesel fuel tax would not change.

Governor McDonnell’s plan is a response to a problem felt nationwide: user-fees haven’t been providing enough money to fund transportation needs.  Through a combination of increasing fuel efficiency of modern cars, and an unwillingness in politicians to risk alienating voters through increases in the gas tax—the federal gas tax hasn’t been raised since 1993—have left the U.S. with congested, aging, poorly-maintained transportation networks, incapable of meeting current levels of demand.  ThatVirginiais contemplating such a seismic change indicates a significant shift in the national conversation on how to fund transportation.

The plan calls for increased vehicle registration fees, to raise an estimated $109 million per year, with half going to intercity passenger trains and half going to transit.  Additionally, passenger rail advocates could benefit from breaking the link between the gas tax and transportation funding, which would—in theory, at least—make a greater percentage of total transportation funding eligible for rail projects. 

The plan relies on money that Congress has not yet approved: 

However, the amount of money outlined in Governor McDonnell’s plan is clearly insufficient to the state’s transportation needs.  The proposal would also open up transportation funding to the yearly budget battles that could see rails and roads competing directly with schools, parks, and public safety.  In fact, the $500 million infusion of general funds called for by the Governor’s plan has already generated this sort of criticism.

Bloomberg notes that “a little more than one-third of the $3.1 billion” in revenues in the proposal “depends on federal legislation that has yet to be approved by Congress” – the ability of states to tax “internet and out-of-state transactions.” 

Carl Davisof the Institute on Taxation and Economic Policy told Bloomberg News, “Walking away from the gas tax entirely is fundamentally poor tax policy.  He's shifting the responsibility away from frequent drivers, long-distance drivers, and commuters on to everybody else and then taking that money back and using it for roads.”

“People see the big signs outside gas stations advertising prices and they're very sensitive to that price,”Davisadded. “What they're not as aware of is the cost they're incurring every year as a result of the gas tax being too low—wasted fuel stuck in traffic congestion, extra wear and tear on their vehicles.”

While McDonnell deserves credit for his willingness to increase taxes for transportation, it is a potentially dangerous game to end the gasoline tax—which no other state has done.  In this climate, it is much easier to turn off a tax than to turn one on, and the net result might be lower revenues rather than higher. 

 

The U.S. Department of Transportation officially committed $135 million to the Sacramento Light Rail Blue Line expansion on January 7, clearing the way for a project that will create an efficient and reliable connection between downtown Sacramento and the rapidly growing South Sacramento County corridor.

The 4.3 mile extension will link downtown toCosumnesRiverCollege, one of the region’s major employers.  With three intermediate stops, the line will provide a critical alternative to Highway 99, which is often choked by automobile congestion.

“The Obama Administration is committed to helping theSacramentoarea create a modern, efficient transportation network to spur new economic development and reduce congestion in the region,” said U.S. Transportation Secretary Ray LaHood.  “AcrossAmerica, we’re investing in projects like this one that are built to last and keep our economy moving forward.”

Sacramento’s light-rail system has seen a 7.4 percent increase in ridership over the past year (FY2011 to FY2012).   In addition to encouraging real-estate development along the corridor, the project will create an estimated 1,000 construction jobs over the next two years.

“California’s capital region needs robust transportation choices to ensure that current and future generations have ready and affordable access to jobs, education, medical appointments and more,” said Federal Transit Administrator Peter Rogoff. “The Blue Line light rail extension will help thousands of Cosumnes students spend less at the pump, and will spur retail and residential development at the new Morrison Creek Station and beyond.”

 

Amtrak outlined its agenda of infrastructure upgrade projects for the coming year, providing details on several projects that will improve service and expand capacity for passengers all over the U.S.

The railroad is strenuously making the case for more investment, pointing to increased ridership, increased revenue, and lowered operating subsidies as proof that the railroad is a responsible custodian of government funds.

“That’s the lowest level in 38 years for Amtrak in terms of a loss,” Amtrak President and CEO Joseph Boardman told reporters yesterday, referring to a $386 million deficit between total expenditures and revenue (down 19 percent compared to the previous year). “We think the numbers are right. Now it’s time to start talking about what policies we want.”

News outlets have taken that narrative and run with it, without explicitly investigating the tens of billions in government subsidies directed at other forms of transportation.  However, after 40 years of starvation-level capital budgets, Boardman is actively looking to build on a decade of unprecedented ridership growth through capacity expansions and service upgrades, and he deserves credit for that. 

Infrastructure projects and planning activities scheduled for 2013 include:

Gateway Program: Amtrak will continue planning and other pre-construction activities on its Gateway Program, to provide additional capacity into New York Penn Station, the busiest train station in theU.S.  The centerpiece of this project will be two additional tunnels under theHudson River.

Improving and Expanding the Amtrak Fleet: Trains all overAmerica are full, and Amtrak is in the process of expanding its fleet to accommodate soaring ridership.  The company will release an updated fleet strategy plan in 2013, with the latest analysis on replacing and expanding its existing conventional and high-speed rail fleet.  Fleet expansion plans already underway include:

·         The first units of a $466 million order for 70 new, American-made electric locomotives will be delivered this year. The new equipment will reach speeds of 125 mph on the NEC, and up to 110 mph on the Keystone Corridor.  (The October 29, 2010, announcement of the order said the first unit would be delivered in February, 2013.)

·         This year, Amtrak will receive the first four test pilot cars of its $298.1 million order for 130 new, American-made single-level long-distance cars.  That includes 25 sleepers, 25 diners, 55 baggage cars, and 25 baggage/dormitory cars.  The railcars will go into service late spring 2014, replacing and supplementing the existing fleet, allowing Amtrak to retire cars that have been in service since the 1940s.  (The July 23, 2010, announcement of the order said the first cars would be delivered in October 2012.)     

·         In the next few months, Amtrak will begin the process to purchase next-generation high-speed rail trainsets for the NEC, looking for a lighter, faster, more modern version of the Acela fleet—and for approval of that from the Federal Railroad Administration.

Building on Upgrades to the Midwest High Performance Hub:  Amtrak expects to reach an agreement with the Michigan Department of Transportation in the next few months to “operate, dispatch and maintain a 135-mile section of state-owned railroad from Kalamazoo to Dearborn,” clearing the way for 110 mph operating speeds for the Wolverine and Blue Water service.  This is the line segment purchased fromNorfolk Southern.

Positive Train Control (PTC): Amtrak is on schedule to complete installation of PTC equipment along all Amtrak-owned rights-of-way.  These advanced signaling systems should increase passenger safety by preventing train collisions and overspeed accidents, and will lay the groundwork for high-performance operations in the future.

Improve Onboard Connectivity: The railroad will forge ahead with the AmtrakConnect Wi-Fi program.  U.S. cellular companies are currently expanding their 4G/LTE network, which is allowing Amtrak to upgrade its onboard Wi-Fi service.  That means faster speeds and improved reliability for internet browsing.  Implementation has already begun on Acela Express.

You can read a full list of the planned work here.


Tallahassee Mayor John Marks brought together passenger rail advocates—including NARP members, business, government, and academic leaders—to reinforce the importance of passenger rail restoration to his city and region, and the need to restore Amtrak service between New Orleans and Florida.  

After listening to a presentation by John Robert Smith, President and CEO of Reconnecting America—who formerly served as the Chairman of Amtrak’s Board of Directors, and as the Mayor of Meridian, Mississippi—Mayor Marks emphasized "this meeting is on regional development, and how passenger rail can help those economic opportunities."  

In the face of strong demonstrations of leadership from mayors in all four Gulf Coast states, passenger rail advocates expect a follow-up summit on the Mississippi Gulf Coast in the spring, as momentum builds to return passenger rail service from New Orleans east to Florida.

 

The Alabama State Legislature has given a green light to conduct a study on restoring passenger train service between Birmingham and Montgomery.  The $182,000 study will pay for an examination of potential revenue, cost and ridership.

The Federal Railroad Administration issued a $100,000 grant towards the study.  The Alabama Department of Economic and Community Affairs will secure the remainder of the financing from the cities ofBirminghamandMontgomery, andMontgomeryCounty.

The study is expected to take nine to 12 months.  A second study to connectMontgomerytoMobileis planned, as well.

 

State officials and management from Amtrak and Burlington Northern Sana Fe Railroad yesterday had an up-close look at deteriorating track conditions threatening the Southwest Chief.  The special train made a daylight run from Topeka to La Junta.

Around 30 to 40 people will ride a BNSF car with theater seating that will allow officials to view the track bed as the train passes over it.  Attendees were to include vice presidents from Amtrak and BNSF, the Kansas Secretary and Deputy Secretary of Transportation, the Kansas Department of Transportation’s Bureau Chief of Transportation Planning, KDOT’s Chief of Governmental Affairs,Hutchinson,KansasCity Manager John Deardoff, Hutchinson Mayor Dave Razo, and several city officials from towns along the route inKansas,Colorado, andNew Mexico.

Maintenance costs to restore the BNSF tracks to acceptable conditions have been pegged at $100 million over the next decade.  In addition, the annual maintenance cost is estimated at about $10 million.  The three states have so far been unable to come up with an agreement on securing the funds.  The current agreement between Amtrak and BNSF which allows the Southwest Chief to operate over the line ends in early 2016 but agreement on funding is needed well before then because two work seasons are required to ready an alternate route.

 

Yvonne Burke and Chris Beall were confirmed to the Amtrak Board of Directors by a January 1 vote on the Senate floor.

"Yvonne and Chris strengthen the make-up of the board with greater geographic representation, bring a wealth of experience and transportation knowledge as well as a strong commitment to the continued growth of America's Railroad," said Amtrak Chairman Thomas Carper.  "We welcome our newest members and know they will contribute to the current and future success of the nation's intercity passenger rail provider and high-speed rail operator."

Burke is fromLos Angeles,California, where she currently serves as a member of the California Transportation Commission.  She has previously served in the U.S. House of Representatives, and was the first African-American woman to represent a West Coast state in Congress.

"Amtrak is making sustained progress in many key areas and I am confident it will continue to do so in the coming years,” said Ms. Burke.  “Amtrak is a national railroad and it must remain so while it moves forward with its plans for next-generation high-speed rail.”

Beall is a partner at Highstar Capital, serving as a member of the Investment and Executive Committees.  He has over 12 years of experience in direct investments, investment banking and finance, and also sits on the Boards of Directors of Star Atlantic and the Ports America Companies.

"I believe that Amtrak is a critical component of national transportation infrastructure and that it plays a vital role connecting communities and providing passengers with convenient access to job centers thus enhancing regional economies," said Mr. Beall.

With the addition of the two new members, Amtrak’s will have all of its Directors positions filled.  U.S. Secretary of Transportation Ray La Hood, and Amtrak President and CEO Joseph Boardman are ex officio members [Boardman non-voting], and the seven Senate-confirmed members include the new ones plus Chairman Thomas Carper of Macomb, IL; Anthony R. Coscia; Bert DiClemente; Jeffrey R. Moreland; and Nancy Naples.

 

Travelers Advisory

—Amtrak announced this week that it will be expanding its high-speed rail service on the Northeast Corridor, adding a late evening weekday Acela Express round-trip between New York and Washington starting January 28.

"A greater focus on the travel needs of our customers, and the improved utilization of our business assets, is making this much needed high-speed service expansion possible,” said President & CEO Joe Boardman in a public statement.

An additional Acela train—Train #2128—will head north from Washington Union Station at 8:00 pm, arriving at New York Penn Station at 10:45 pm.  Another Acela— Train #2175—will travel south from New York Penn Station at 9:15 pm, arriving inWashingtonat 11:59 pm.  This train is an extension of the 5:20 PMBostondeparture which has been terminating atNew York City.

—Amtrak Guest Rewards point redemption policy changes: Effective January 1, if you redeem points for a free trip and then “no show,” you will not be able to have your points refunded to your account.  Redemption reservations must be canceled prior to first scheduled departure for points to be re-deposited into your account or exchanged for a different itinerary.  Also, effective Nov. 1, 2012, those redeeming points for free coach travel are no longer able to upgrade to a sleeper, Business Class or Acela First Class by paying the conductor on-board.  Upgrades can only be made with Amtrak Guest Rewards over the phone (1-800-307-5000) by redeeming additional points.  Finally, effective Jan. 1, Amtrak Guest Rewards has introduced a new elite tier: Select Executive, achieved by earning 20,000 Tier Qualifying Points (generally through Amtrak travel) within a calendar year. Details at www.amtrakguestrewards.com.

—Amtrak is offering 20 percent discounts on select Midwestern trains for travel between now and March 31, 2013.

Discounts are available on the Lincoln Service, Illinois Zephyr, Carl Sandburg, Illini, Saluki, Wolverine Service, Blue Water, Pere Marquette, and the Missouri River Runner.

You can find the complete details on Amtrak’s website.